Cleaner power station means SSE can use UK coal without adding to greenhouse gases

Published Date: 28 April 2009
By Hamish Rutherford

SCOTTISH & Southern Energy has signed its largest deal to buy UK-produced coal after fitting one of its power stations with equipment to cut greenhouse gas emissions.
Because of the high level of sulphur in most British-mined coal, the company's stations have been powered by imported fuel from around the world.But a new flue gas desulphurisation plant added to the firm's Ferrybridge station in West Yorkshire earlier this year allowed SSE to sign a deal to buy 3.5 million tonnes of coal from Doncaster-based UK Coal.The coal can now be burned at the plant as the new equipment will remove sulphur dioxide, a greenhouse gas, from the station's emissions.According to SSE, the contract is expected to supply about 15 per cent of the coal requirement at Ferrybridge between late 2009 and 2014.A spokeswoman for Perth-based SSE said the company could take more coal from the UK at Ferrybridge, but domestic supplies were insufficient for its needs.Under the terms of the latest contract, SSE is providing a secured, interest-bearing loan to the UK Coal company, which will supply the fuel, to assist with capital investment to upgrade production some of its mines.The loan, the size of which was not revealed yesterday, is due to be repaid by 2014.SSE said the coal would be supplied from deep mine and surface sites in the UK, including Kellingley Colliery in North Yorkshire. Financial terms of the deal were not disclosed, but in a statement SSE said prices would be linked to global prices, with a ceiling and floor to reduce price risk.SSE chief executive Ian Marchant said that while the company was attempting to reduce the carbon intensity of its generation by 50 per cent by 2020, "the security of the UK's energy supply" meant coal would continue to have a role in its plans."Our investment in equipment to remove emissions of sulphur means we can now make this substantial commitment to an indigenous source of fuel, thereby supporting jobs in the UK's mining industry."Shares in SSE rose 38p, or 3.6 per cent, to 1,103p.